(Source – CarDekho)
China’s electric vehicle (EV) giant, BYD, has set a new milestone by recording an unprecedented surge in global car sales in 2023, closing the gap with Tesla and solidifying its position as a formidable player in the EV market. According to a recent stock exchange filing, BYD electric vehicle reported an astonishing 62% increase in overall global sales, surpassing three million units last year, compared to the previous year.
The surge in sales was fueled by a remarkable uptick in the demand for BYD electric vehicles (EVs) and hybrids. The company sold an impressive 1.57 million BEVs, marking a substantial 73% increase, and 1.44 million hybrids, reflecting a remarkable 52% growth compared to the previous year.
BYD Electric Vehicle Overtaking Tesla in the last quarter
In 2022, BYD electric vehicle lagged behind Tesla in global BEV sales by approximately 400,000 units. However, the latest figures indicate a significant narrowing of this gap, with BYD potentially overtaking Tesla in the last quarter of 2023, as it reported selling 526,409 BEVs in that period, a surge of over 20% from the previous quarter.
The surge in BYD’s sales is emblematic of China’s burgeoning electric vehicle industry, backed by substantial support from the government. China’s rapid transition to electric vehicles is evident in its ambitious targets, including a goal set by Beijing for at least 20% of new cars sold annually to be new energy vehicles (NEVs), comprising BEVs, plug-in hybrids, and hydrogen fuel cell vehicles, by 2025. By 2035, the government aims for NEVs to become the mainstream in new car sales.
NEV penetration target of 50% by 2035
China’s success in achieving these targets is reflected in the data released by the China Association of Auto Manufacturers, indicating that in the first 11 months of 2023, 8.3 million units of new energy vehicles were sold, constituting over 30% of total car sales. Miao Wei, former minister of China’s Ministry of Industry and Information Technology, even suggested that the government’s NEV penetration target of 50% by 2035 might be achieved by 2025 or 2026 at the latest.
Analysts attribute China’s leading role in the global EV industry to factors such as market scale, cost-effective labor, and supply chain dominance. Natixis Asia, a French investment bank, emphasized China’s production leadership, underlining the advantages derived from its massive domestic market and the first-mover advantage.
Despite China’s ascendancy in the EV sector, challenges persist, including intensifying competition and a fierce price war that impacted the profit margins of numerous car manufacturers in the previous year. The price war, triggered by Tesla’s price cuts in China, led to increased sales but also posed a threat to industry-wide profitability. As China’s economy showed signs of losing momentum, automakers, including Tesla, engaged in a competitive battle to attract customers.
To counter the effects of a slowing domestic market, Chinese car manufacturers, including BYD electric vehicle have been pursuing growth beyond mainland China, expanding their presence in Europe, Australia, and Southeast Asia. In a strategic move, BYD recently announced plans to establish an EV factory in Hungary, marking its first passenger car plant in Europe, complementing its existing bus factory in Komárom, Hungary. This expansion underscores BYD’s commitment to global growth and its aspiration to become a dominant force in the international EV market.
